Block-Aid Limited v The Commissioners for HMRC
Decision date: 18 April 2024
Neutral citation: [2024] UKFTT 339 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
Block‑Aid Ltd appealed VAT assessments issued by HMRC disallowing input tax where invoices appeared paid in cash. The Tribunal held that Block‑Aid proved input tax only for vehicle purchases (supported by V5C transfers and payment evidence) but failed to discharge the burden of proof for haulage, tyres, groundworks and security; accordingly the assessments were upheld except for a reduction of £13,775 for the vehicles.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
The Tribunal applied the principle that entitlement to input tax requires that a supply has in fact been made and that the claimant holds the requisite VAT invoice; where the reality of supplies is in doubt, invoices alone may be insufficient and HMRC are entitled to require corroborative evidence (eg payment records, third‑party confirmation) to discharge the taxpayer’s burden of proof.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The judgment indicated that HMRC’s decision, after a fraud investigation, not to prosecute does not bind HMRC in subsequent civil VAT assessments and should not be treated as conclusive evidence that the underlying transactions were genuine. It also observed that hearsay third‑party statements not tested by cross‑examination may be admissible but are of reduced weight.